3/5/13…sequester (quarantine?) the GOP for the common good!

From the Friars Club Encyclopedia of Jokes: “I say help the British! If it weren’t for them we’d all be talking some language we couldn’t understand.” – Bo Brown and:

“The English think incompetence is the same thing as sincerity.” – Quentin Crisp

Bloomberg Quote of the Day: “Feel the fear and do it anyway.” – Susan Jeffers

Bloomberg Top Stories:

*Dow Surges to Record at Corporate Profits Stoke Four-Year Rebound – oh gimme a break!

*Stocks Climb With Metals on Economic Stimulus Outlook (yawn); Italian Bonds Gain

*Pound’s World-Worst Slide Seen Extending as Pimco Joins Bears on Currency – Soros?

*Citigroup Books $579 for Profit Sharing Stockholders Voted Against – spit in your eye!

*EU Opens Way for Looser Budget Policies After Italian Austerity Vote

*Standard Chartered Cuts Bonuses, Boosts Dividend After $667 Billon Fine – enough!!!

*Ex-Lehman Derivatives Banker Banchetti Helps Paschi to Unravel Contracts

*Morgan Stanley Leads Busiest Day for Europe Bank Bond Sales in Two Months

*Scotiabank Quarterly Profit Rises 13% on Consumer Banking, Boosts Dividend – now that is a bank acting like a bank…and the shareholders, not just officers, reap benefit!!!

*Tokyo Reversing Two-Decade Slide in Market for Office Rentals

*Billionaire Iodine King Wields X-Ray Power Over Potash Debt

*Beautician Battles Billionaire Over New Hong Kong Law That Conceals Assets

*S&P Credibility Seen Degraded by Failing to Disclose Soured Mortgage Deals – DUH!

*Chavez Breathing Problems Worsen as Chemotherapy Suppresses Immune System – Aw

* Chicago to Get More Snow as 1,000 Flights Canceled by Storm Over Midwest

*Shell’s Pipelines Sabotaged as Nigeria’s Oil-Theft Gangs Intensify Attacks

 

Another day of meaningless rally – meaningless due to the lack of volume and especially retail participation: a rally that waits to die? Round and round it goes, where it stops only the high frequency traders know…a fool’s folly! All of the major indices up from 0.2-0.5% except Dow Transports which sprinted up 1% and Dow Utilities up 0.9% – strange bedfellows indeed!

The high on the Dow was 14128, shy of 2/28’s 14149 high but squeaked out a new high close of 14128…big whoopee! Transports continue to be the big story, despite a tepid economy as they had a record high of 6046 yesterday, above the double top of 6020 pm 2/19-20 and obliterating all prior years!!! Year-to-date they are up 13.9%!!! – double the best indices! In contrast the two Nasdaq indices are up 5.4% and3.7% respectively. Dow Utilities are up a respectable 7.2% so far this year but well off their highs set on 8/1/12 (for that 12 month period they were up 11.1% – 14.1% with reinvested dividends! – ah, yes, boring utilities…growth stocks are where it’s at…not!!!). The S&P 500 looks similar to the Dow…’nuf said.

Total NYSE total volume dropped sharply to 3.38B shares from an ‘average’ 3.76B shares vs 3.53B vs 3.92B vs 3.81B vs vs 3.41B vs 4.26B and 4.2B (highest of 2013 by about 400M shares). Real NYSE volume also dropped to 693M shares vs 743M vs last Thursday’s (monthend) 1.01B shares!!!(second only to 1/18’s 1.07B and third best to 12/21’s 12 mo. high of 1.88B shares) vs 673M vs 772M vs 819M vs 683M. Note the average volume since 2/15 is a weak 781M shares!!! Ave vol. 12 mos. 747M, ytd 716M. There have been just eight 800+M shares in 2013. This is a very weak rally!

  1. new highs which have ranged from 121-680 (2/19), then plummeting to just 121, surged to 418 vs 274 vs 326 vs 268 vs 145 vs 273 vs 214. New lows were slightly higher at 98 vs 93 vs 59 vs 49 vs 74 vs 52.
  2. Advance/Declines were slightly positive at +1.3x vs +1.3x vs +1.1x vs +3.2x vs +2x vs -3.6x on NYSE and +1.2x vs +1.3x vs -1.1x vs +2x vs +1.5x vs -4.4x on Nasdaq. Breadth was similar at +1.5x vs +1.2x vs -1.1x vs +6.2x +2.4x vs -9.7x on NYSE and +1.8x vs +1.7x vs -1.1x vs +4.4x vs +1.6x vs -4.5x on Nasdaq.
  3. The Nasdaq 100 was tied with the Composite at +0.4% and +11.8 points. Apple though was once again the big loser dragging it down by 8.5 points so ex-Apple it would have been up about 0.7%. Also, the Russell 2000 small cap was up just 0.2% after being up 0.4% for two days and was best performer!
  4. NYSE Financials rose 0.5% in vs +0.1% vs -0.2% vs +1.4% vs +0.6% vs -2.5%. BofA still most active rose 0.6% to $11.41 vs +0.1% vs +1.7% vs +0.9% vs -1.6%, coming back from $11.11, lowest since 12/17, well below the 40/50 day m/a’s for the lowest close this year – from $12.42 high on 2/13. Note that due to the low price 11 cents is a 1% change!!!  MBIA (+24%) and MGIC +10.3% – +30% at the day’s high!) benefitted from a belief that they would get a bigger share of mortgages as government lowers its exposure…but that much??? Shorts!
  5. Lastly volatility (S&P VIX) which had back to back lows going back to 2006 – huge complacency, had risen 52% in four days: 12.13 – 18.99 (with an intraday high Monday of 19.11, highest since 12/31 – highs on 12/30-31 were 22.72 and 22.19 respectively, highest since 6/15. It fell to 14.01 -1.35 or 8.8%! from 15.36 – plunging through  the 50 day m/a (14.68). An increase in VIX is associated with more puts being created than calls!!!

European equity markets plus India are STRNG overnight, Asia not so much: UK +1.1% vs -0.4% vs -0.7% vs +0.4% vs +0.1% vs -1.3%; France +1.6% vs +0.2% vs -1.5% vs +0.1% vs +0.7% vs -1.9%; Germany +1.9% vs -0.4% vs -1.2% vs +0.6% vs +0.2% vs -1.5%; Japan +0.3% vs +0.4% vs +0.4% vs +2.7%!!! vs -1.3% vs -2.3% vs +2.4%, Hang Seng +0.1% vs -1.5% vs -0.6% vs +2% vs +0.3% vs -1.3%; Kospi +0.2% vs -0.7% vs closed vs +1.1% vs +0.2% vs -0.5%; India +1.4% vs -0.2% vs +0.3% vs +1.5%! vs +0.7% vs -1.6%. U.S. stock futures trading in a narrow range, but at session highs: DOW +55; SPX +6.50; NDQ +16.50. Payrolls on Friday – caution!

Bonds were slammed yesterday and weaker again overnight: 10 yr Treasury range of from 2.06% to 1.85% last 10 sessions, now 1.89% -3/16, and the 30 yr’s 3.23% to 3.05%, now 3.09% -5/32. The long Tip also weak at 0.53% vs 0.50% vs the high of 0.60%. Libor update: 0.241% 3 mos., 0.452% 6 mos!!! Foreign bond yields mixed for a third session: Germany 1.43% +2; UK 1.94% +3; Italy 4.78% -9; Spain 5.04% -3; Portugal 6.01% -21; Greece 10.78% -11. Japan 0.62% +2.

Gold barely budged as it struggles to find support as the loss from the 1/17 high of $1699.90 remains at $119! It closed at $1572.40 +.10, down -$75 in six sessions but still above a week ago Thursday’s low of $1554.30 – not seen since May 2012! Overnight it is $1582.40 +$10.00! The total breakdown through the 40/50/200 day m/a’s, has major resistance $1646-1669, with first resistance at $1600, a double bottom from 8/14-15, also a psychological level. Last time it was below $1500 was Sept. 2011!!! Crude was slammed again yesterday to yet another new low of $89.33, lowest since 12/26, and way below the 40 day ($94.93), AND $94.10, the 50 day. It closed at $90.12 -.56. Overnight it is slightly higher at $90.62 +.50 in a tight range, just above the 200 day 90.37!

Some random thoughts:

Will leave you to your own thoughts today as TB is thoroughly disgusted with the GOP. In good company apparently as Jeb Bush has now joined Bobby Jindal in damning the party for its own good. If you sit idly by and let the fringe run this party and distort facts with lies using scare tactics, you are being complicit in its demise. Think about it!

Without a doubt THE BEST column written by anyone…consistently. Here is the link: The Baseline Scenario

Also more on sequestration by Robert Reich: Sequsetration and RFK

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